Posted by Tim O’Brien on January 08, 2011 at 07:04:19:
Pathetic, You suffer from cognitive dissonance. The links you provided
are a joke. We regularly use the EHT in Ohio. You should avoid trusts at
all costs because you don’t have the mental capacity for understanding.
Stick with whatever it is you do.
advice needed - Posted by Victor
Posted by Victor on January 02, 2011 at 12:21:54:
I have a potential deal. The property is a duplex it is fully rented both top and bottom units and is in good shape.
The property is worth 165k he is getting $415 for the bottom unit and $700 for the top unit and pays 450/mo for a mortgage. The owner says the lowest he could go is 140 and the best cash offer i could do for this property is 100k. He is opened to terms and I know you can offer more with terms but im not sure what type of terms to offer. What is the most i could offer with terms is the 140 too high even with terms and should it be interest only with a ballon or regular interest principle payments.
I have never offerd terms before please help.
Re: advice needed - Posted by BenT
Posted by BenT on January 03, 2011 at 22:23:14:
This building is overpriced. There is no deal here. If you pay $140K you’ll be struggling to breakeven. Surely at a time when we record foreclosures, bankruptcies, and home prices falling in again, you don’t have to go for a marginal deal.
Ben
Re: advice needed - Posted by Marle
Posted by Marle on January 02, 2011 at 20:03:21:
The property is a duplex it is fully rented both top and bottom units and is in good shape.
How long has it been fully rented?
How do you know that? Have you seen the leases?
When did the leases begin, when do they terminate?
What is the term on the leases? Are they 30 day, 6 month, yearly, other?
Do the tenants pay on time, all the time?
Is it under property management?
If not, who will manage it if you buy it?
Who pays for utilities?
Do you have the ability to manage it yourself or will you have to hire a management co?
What are the rents in the local area? If a tenant moves out, will you be able to rent it for that same amount? And How quickly?
How often does he have to evict tenants?
How do you know the property is in good shape?
Do you own other rentals? Do you know what you would be getting into?
Are you aware that most investors expect that 50% of the income will go to expenses?
Then they still have to pay the mortgage.
The property is worth 165k he is getting $415 for the bottom unit and $700 for the top
How do you know it?s worth that? What is the tax assessment? Have you seen recent comps?
Have you inspected it or had it inspected? What repairs are needed? Are you able to do them, or will you have to hire them done?
What is the ARV?After Repair Value? Without knowing that, there?s no way to determine an OFFER amount, let alone a top purchase amount.
What?s happening in the area? Is it improving, or deteriorating? Why is he selling?
What KIND of area is it?
(he) pays 450/mo for a mortgage.
What he pays is not important. What YOU will have to pay is.
The owner says the lowest he could go is 140 and the best cash offer i could do for this property is 100k. He is opened to terms and I know you can offer more with terms but im not sure what type of terms to offer.
Why not figure out what the purchase price really should be in order for you to get more than a few bucks a month, (or end up having to pay out of pocket for your debt) and then get a mortgage from a mortgage company for that amount minus your down payment?
(You should figure borrowing the full amount, otherwise you are not fair to yourself. Whatever your down payment is, remember, that money is no longer collecting interest for you, so it?s costing you money)
What is the appraised value?
Google 50% and 2% rule, and gross rent multiplier, and apply them to different scenarios here. They are screening tools to help an investor determine if a property is a good investment at a particular price. The gross rent multiplier: annual rent x ten to get purchase price
The 2% rule states that you would want 2x the purchase price + rehab for rents (I.E. $100k property would yield you $2k in rent for it to be a good deal). Again search more on the topic…
The 50% rule is a guideline to evaluate a deal relatively quickly to see if it will cash flow.
It states that 45-50% of gross rents will “eaten up” by expenses.
a few Possible Expenses: This does not include mortgage payments.
Taxes
Ins.
Repairs/maintenance
Property management
Vacancy / cleanup/advertising
Water
Garbage
Yard service
Roof/other capital expenses
It seems to me you need a lot more information before you talk to the seller again.
What is the most i could offer with terms is the 140 too high even with terms and should it be interest only with a balloon or regular interest principle payments.
You need a LOT more information that what the seller is giving you.
Consider joining a local real estate investment club, learn what formulas and other criteria investors use before proceeding in this.
This is not legal advice nor financial advice. I am not an expert in either field, and the above is a rough beginning of what I would do if I were in your shoes.
Re: advice needed - Posted by WAREIA
Posted by WAREIA on January 02, 2011 at 17:20:24:
Either offer him…
Lots of Cash, say $100k and have him carry a private 2nd of $40k due in 5 years.
Full Price to carry the entire thing via an Equity Holding Trust.
Less than Full Price, give him upfront cash and then carry the remaining about via an Equity Holding Trust.
Re: advice needed - Posted by Dan
Posted by Dan on January 02, 2011 at 20:36:19:
Holding title in a LLC would be safer. An Equity Holding Trust doesn’t offer much, if any, asset protection!!
Re: advice needed - Posted by WAREIA
Posted by WAREIA on January 03, 2011 at 10:35:19:
I don’t know where you got you information but you have it backwards. However, I agree you should have an LLC but as “A” beneficiary of the Trust. I’ve done hundreds of EHT transactions over 12 years and defended each challenge to them successfully, not only from Judgment Creditors, Bankruptcy Courts and even the IRS. An LLC cannot do that by itself.
Re: advice needed - Posted by AmotoXracer
Posted by AmotoXracer on January 07, 2011 at 17:39:03:
Does the magic “gatten eht land trust” protect you from liability ?
Re: advice needed - Posted by Dan
Posted by Dan on January 03, 2011 at 11:19:16:
I?m glad to hear you?ve been lucky so far, but don?t count on your luck holding out forever.
Google ?land trust asset protection?, there is one article after another by people with legal credentials that say land trusts do NOT provide asset protection. Here?s one for example:
http://www.assetprotectionbook.com/a2_asset_protection_trusts_land_trusts.htm
Nobody with any real knowledge of the land trust law would make the claims you are making. Do you have a law degree, what are your credentials regarding land trust law and asset protection other that you have been lucky so far.
You mention the EHT trust ? I see you are layering one time bomb on top of another. This has been determined to be illegal with the possibility of fines and jail time if caught by the Ohio Real Estate Commission. It will probably be determined to be illegal in other states as well when it comes before the Real Estate Commission. Here is the link: Ohio real estate investor’s warning statement on Robert Kiyosaki and B – John T. Reed.
defended challenges to Bk Court - Posted by JT-IN
Posted by JT-IN on January 03, 2011 at 10:54:41:
“defended each challenge to them successfully, not only from Judgment Creditors, Bankruptcy Courts and even the IRS”
Please provide specifics about the Bk case that an EHT successfully shielded assets from the Bk court. I am afraid that what will be born out in any info provided is that there was some other ingredient, and not the EHT, that survived the long arm of the Bk court. But please do provide the info and I will see if I can analyze the case and see if I can prove your claim to be valid.
Re: advice needed - Posted by WAREIA
Posted by WAREIA on January 07, 2011 at 20:53:36:
As an Investor Co-Beneficiary, I have absolutely no risk or liability unless of course I have committed some sort of fraud associated with the transaction such as the jackasses did in Ohio. The “Magic” EHTrust stood, the idiot who chose to attempt to defraud another party by using altered NARS documents without permission or legal review was an idiot.
Re: advice needed - Posted by WAREIA
Posted by WAREIA on January 03, 2011 at 18:10:16:
You are wrong and laughable and have no idea what you’re talking about. I have no problem with your first link but it is incomplete and does not address the EHTrust specifically. Your second reference is by John Reed, one of the biggest idiots and least knowledgable people I know.
What are my qualifications, Howbout hundreds of successful transactions via using an EHTrust, several challenges and no loses, including the Ohio Real Estate Commission. But of course Mr. Reed won’t tell you about that, will he?
Unsupported claims dismissed - Posted by John Merchant
Posted by John Merchant on January 03, 2011 at 19:41:36:
If I were a judge hearing such a claim as here made by WAREIA I’d demand to see written proof like court citations or final judgments…and without such I’d dismiss his claims in a flash.
Re: defended challenges to Bk Court - Posted by WAREIA
Posted by WAREIA on January 03, 2011 at 18:22:24:
I’ve been a co-beneficiary of several EHTrusts where one of the other beneficiaries ended up filing a BK. Not once has this ever affected the trust, the property or any other beneficiaries of the EHTrust. It only affected the beneficial interest of the one filing a BK. Their “personal” interest in the trust, which at that point has no real value is left intact with no negative affect to the others.
These were well established EHTrusts. I do understand that a BK Trustee can in some cases determine that the placing of the property in such a trust may be considered Fraudulent Conveyance, especially if it was done within a year or so of one of the beneficiaries filing a BK. There is also the question of Intent.
Sorry, I can’t and won’t provide you with any “proof” since I was not the beneficiary filing the BK.
Re: advice needed - Posted by AmotoXracer
Posted by AmotoXracer on January 07, 2011 at 17:46:36:
Ive done hundreds of successful transactions in my own personal name, so I must be protected right ??
Re: advice needed - Posted by Dan
Posted by Dan on January 03, 2011 at 19:52:26:
Laugh all you want, these facts aren’t coming from me. They are coming from creditable attorneys and the real estate commission. All of Gatten’s land trust schemes have serious problems, it doesn’t matter if you call it a EHTrust, Pactrust, a co-beneficiary land trust, or an ABCDEFTrust, they all lack asset protection and can result in fines and possible jail when the real estate commission catches up with you.
Re: Unsupported claims dismissed - Posted by Tim O’Brien
Posted by Tim O’Brien on January 08, 2011 at 07:05:54:
That’s why you aren’t a judge. It takes critical thinking.
Re: Unsupported claims dismissed - Posted by WAREIA
Posted by WAREIA on January 07, 2011 at 21:21:48:
…and if you were “a judge”, our Attorneys would provide it to you.
Tick - Tock - Posted by timekeeper
Posted by timekeeper on January 05, 2011 at 17:09:08:
Seems like time is wasting away here and no input on the facts or outline of your claim above. What gives here; could this have been a false claim?
Hint: Your claims are starting to make you look bad here.
Real equity protected by an EHT - Posted by Kristine-CA
Posted by Kristine-CA on January 04, 2011 at 10:37:21:
Since this is a learning/sharing site, please help us learn something. Can you give an example of one of the several BKs you know of…where lots of equity was protected by an EHT? Not the actual case, but just the summary of numbers.
I’m with JT. I want to see when and how an EHT really works as asset protection. So far it’s still all hear-say. The same was true with the produce the note strategies…how are those going these days? 